This bizarre behaviour of the sellers had not been seen in the past. There wasn’t any earth-shattering event last week that could be pinned down to explain the frenzied panic selling. The most common explanation we heard from market participants was the US Securities and Exchange Commission singling out five ADRs for failing to submit their auditor notes.
Something freakish took place in China ADRs last week. Almost every once-beloved American Depositary Receipt seemed to be infected with a panic-selling “virus”.
Over just two days, Alibaba Group Holding’s stock price dropped 14%, Meituan -20%, JD.com -23%, PinDuoDuo (PDD) -26%, and Didi Global -50%. The indiscriminate selling was not limited to just a handful of stocks, as the KraneShares CSI China Internet ETF — which tracks the CSI Overseas China Internet Index — dropped 19% over two days.
